Read India Right

Prakash Sharma is a senior IT industry executive, is IIT Alumni and tweets from handle @India_Policy on policy and governance choices for India. In his outlook, he is Pro-Freedom, Pro-Choice and a Centrist-Liberal.

Food Security Bill in its current form create more problem that it solves

No right thinking and compassionate Indian can argue against the Food Security to millions of Indian poor who suffer hunger worse than sub-Saharan Africa. But, instead of fixing the structural issues, how worthwhile it is to do more of the same things that have failed us over the last 60 years? Before knee-jerking into the lakhs of crores of public money into the Food Security Bill (FSB), have we understood how is it going to affect farmers, rural incomes and the intended beneficiaries?

Let me not even take the fiscal argument as I believe money should not be a constraint for a cause like this but let us look at how various stakeholders are going to get affected by this. First, let us look at the farmers currently suffering from following:

Not getting market price for their yield.

Not getting advance price signals from the market to know what to grow for a rewarding remuneration.

Not being able to freely decide who to sell the produce. This also obscures the crop choice of farmers. Why do you think too many of them grow only wheat and rice and not pulses or lentils?

With FSB, all the above hardships would get further accentuated as the Government would almost entirely monopolize procurement of the agriculture produce. Food Corporation of India(FCI)’s procurement needs would massively increase after FSB and the Central Government would decide what price to pay, what to grow and who to sell to.

Second, let’s look at the execution model that the FSB proposes to use. We all know that the current system of food supply chain run by FCI and National warehousing corporation wastes more than 35% of food-grain. We also know that the current Public Distribution System (PDS) system of targeting BPL cards leave many eligible poor out while allowing many undeserving ones to benefit from. FSB proposes to use the same system. “If implementing the bill is to cost Rs 6 lakh crore over a three-year period, as the Commission for Agricultural Costs and Prices (CACP) reckons, that’s a huge Rs 3 lakh crore to be siphoned off by various middlemen along the way.”

Third, let us look as what will Food Security Bill will do to the food availability in the country. FSB will dramatically increase the government procurement of food-grain from the market, crowding out private procurement. A third of it will get rotten and inedible in Government go downs. Of what would be left, target beneficiaries can hope to get only half of it, rest being pilfered to open market. This will create an artificial scarcity and runaway food inflation in India. A scary scenario!

So in summary, the Food Security Bill in its current form will distress farmers and rural incomes, cause food scarcity and runaway inflation without much benefiting the hungry and while creating a fiscal hole in country’s finances.

Having made the case against the Food Security Bill in its current form let me also give some pointers, what should be done to fight hunger:

1) Gujarat has shown the way on how by working on irrigation, rural Infra (including power), crop diversification (including fruits and vegetables) animal husbandry and allied activities, farm productivity can be transformed. Not only that, this also resulted in growth in rural income, a prerequisite for comprehensive food security.

2) Strengthen or add physical and IT Infrastructure to FCI, Nation warehousing corporation and the entire Food-Supply-Chain.

3) Focus on overall malnutrition, not just calories is carbohydrates. Current focus is entirely on grains, while neglecting fruits, vegetables, milk and eggs. Government must promote the diversification of food

4) Above all, we need a comprehensive approach of poverty alleviation, which along with food scarcity and food inflation is the basic cause of hunger and malnutrition.